Forecast for corn use in ethanol lowered in March WASDE

The USDA has lowered its forecast for 2018-’19 corn use in ethanol by 25 million bushels in its latest World Agricultural Supply and Demand Estimates report, released March 8. The WASDE report also predicts lower corn exports and larger stocks.

According to the report, the USDA now predicts 5.55 billion bushels of corn will go to ethanol production, down 25 million bushels from the February WASDE. The reduction is based on the most recent data from the USDA’s Grain Crushings and Co-Products Production report and the pace of weekly ethanol production during February as indicated by U.S. Energy Information Administration data.

The forecast for corn exports is 2.375 billion bushels, down 75 million bushels from February. The reduction reflects diminished U.S. price competitiveness and expectations of increased exports for Brazil and Argentina.

With no other use changes, the forecast for ending stocks is raised 100 million bushels, to 1.835 billion. The season-average corn price received by producers is lowered 5 cents at the midpoint to $3.55 per bushel.

Internationally, the report indicates the forecast for Brazil corn production is unchanged, with increased yield expectations offset by a reduction in area. Faster-than-normal planting progress improves yield prospects for second-crop corn in the Center-West, while area is down reflecting updated expectations for both first and second-crop corn. Corn production is raised for India, but lowered for South Africa.

According to the WASDE report, major global trade changes for 2018-‘19 include higher projected corn exports for Argentina and Ukraine and reduction for the U.S. For 2017-’18, Brazil’s exports for the marketing year ended February 2109 are raised based on larger than expected late-season shipments. Partly offsetting is a reduction in Argentina. China’s corn feed and residual use is raised. Corn imports are raised for the EU and Canada. Foreign corn ending stocks for 2018-’19 are lowered from last month, mostly reflecting reductions for China, Brazil and Argentina.